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Anniversary of Attacks in Brasilia, IPCA Inflation Data Due Thursday

BRAZIL
  • A 1.3% decline for the Bloomberg commodity index on Monday is weighing on the Brazilian real at the open this week, with USDBRL marginally firmer at 4.90. Little new information in the central banks’ Focus survey leaves expectations cemented for the continuation of the BCB’s gradual 50BP easing pace. Thursday’s release of December IPCA inflation will garner the most attention on the domestic docket.
  • As noted last week, despite some investor expectations that the two new policymakers, picked by President Lula, will be more dovish, two former Copom deputies told MNI that the change is not expected to have a short-term impact. Both of them feel the BCB's strategy is well-established, and that while there will be a longer-run effect on board discussions, this will largely be felt after the end of 2024, following the conclusion of Governor Roberto Campos Neto's term.
  • Leading politicians and government officials, including President Luiz Inácio Lula da Silva and Finance Minister Fernando Haddad, are expected to attend an event marking the anniversary of the attacks on government buildings in Brasilia in protest at the results of the 2022 presidential election.

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